More Legal Trapdoors For Employers Looking To Hire

What should you be able to ask a potential employee during a job interview? Are there certain jobs for which inquiring about someone’s employment status is reasonable and others where it isn’t? Recently enacted legislation by the New York City Council as well as other proposal floating around at both the state and national level underscore that if some legislators have their way, you are going to need a lawyer in the room when interviewing prospective job applicants.

Exhibit one is a local law passed by the New York City Council over the veto of Mayor Michael Bloomberg, who actually has extensive experience in hiring people in the private sector. This law makes it unlawful for an employer to discriminate based on a job applicant’s employment status. The ordinance not only prohibits, with certain exceptions, an employer from publishing job postings listing current employment as a requirement for the job, but creates a private right of action and empowers the city to impose hefty fines on employers who violate these provisions. Employers are still allowed to inquire about a person’s employment status but if they do so the burden is on them to show why it is reasonable to be asking such questions in the first place. Remember, only our brethren based in New York City must comply with this new requirement. But, as anyone who attended our yearly walk-around the state capitol yesterday may have sensed, New York City carries a lot of weight in the legislature and proposals like this often end up being debated at the state level.

A second proposal being considered by the Council has a little more traction nationally. Recently, the Council held a hearing on a proposal banning the use of credit reports as part of the hiring process. A similar proposal has been introduced both in Congress and in the state legislature. The Fair Credit Reporting Act already mandates that applicants be put on notice when their credit reports are going to be reviewed as part of an employer’s due diligence. In expressing opposition to the proposal, a representative from the Bloomberg Administration pointed out that unlike similar proposals that have been enacted in states and localities across the country, the Council’s proposal makes no exception for credit unions, banks and other financial institutions for whom a job applicant’s ability to handle money is certainly something worth considering before making an offer.

Against the backdrop of the persistently high unemployment rates we are experiencing, proponents of these measures argue that disqualifying someone from job consideration due to their unemployment is, like racial characteristics, another example of disqualifying someone based on attributes over which they have no control. The problem with this logic is that it categorically assumes that employers discriminate against job applicants. This conveniently overlooks the fact that there are many situations where someone’s credit report or employment status is relevant, particularly when you are trying to whittle down a field of more than one qualified applicant. Furthermore, one of the reasons why this country is so much more productive on a per capita basis than every other nation in the world (including China) is because we try not to make it too expensive to hire and fire people. The more well intended legislators place legalistic straight jackets on what can and can’t be considered when making determinations, the more expensive it’s going to be to hire anyone, and that is bad news for the unemployed.